The rand remained firm but range bound in late trade on Friday as the dollar slid to a one-week low against the euro on renewed credit woes.

By 3.45pm the rand was bid at 7.7198 to the dollar from a previous close of 7.6950. It was bid at 12.3306 to the euro from a previous 12.1554 and at 15.4015 against sterling from 15.2170 before.

The euro was bid at US$1.5939 from US$1.5785 overnight, while gold was quoted at $964.95 a troy ounce from $944.40 overnight.

RMB analysts said in their morning report that the rand is still in its downside trend channel but needs to break below 7.65 per dollar in the next few sessions to keep the move alive.

"With movements reattaching to fundamentals somewhat the ZAR does have the positives from US equity gains, slight USD weakness, and news reported in today's New York Times that the US government would consider taking mega mortgage lenders Fannie May and Freddie Mac into conservatorship if their problems continue," they said.

A rand break stronger though may still be difficult given that some momentum has been lost.

"Also note the very nervous trading conditions; with US financial shares in deep trouble overnight and oil prices spiking after Israel stepped up its rhetoric on Iran. Uncertainty then remains large and we look for a continuation of the 7.65 — 7.82 range. A break either side is needed to establish direction," they said.

Dow Jones Newswires reports that the dollar dropped to a one-week low versus the euro early Friday in New York amid concerns over the fallout from possible government support of mortgage giants Fannie Mae and Freddie Mac.

The euro surged to $1.5878, up more than one US cent from its intra-day low and its highest level since 3 July. The single currency is now less than two US cents from its all-time high of $1.6020.

Data out Friday showing the US trade gap narrowed in May provided the dollar a bit of support, but this was offset by crude oil prices that continue to notch record highs.

Locals may start buying bonds next wk

Bonds were steady during the afternoon on Friday as the rand held its ground, with a senior dealer feeling locals might even start investing again next week.

"The currency has held up okay and I have seen a couple of bids coming on the bonds," said the dealer.

By 4.02pm the short-term government R153 bond was at 11.470 percent from its previous close of 11.410 percent, while the medium-term R157 was bid at 10.565 percent from 10.480 percent at the previous close. The long-term R186 was bid at 10.310 percent from 10.225 percent before.

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